Poultry breeders accuse big firms of unfair practices

Poultry breeders accuse big firms of unfair practices

JAKARTA (JP): Small-scale poultry breeders accused major
poultry companies on Wednesday of engaging in unfair business
practices, including price-fixing and holding a monopoly.

M. Alie Aboebakar, chairman of the Indonesian Association of
Poultry Breeders (PPUI), which groups the country's small-scale
breeders, accused the big companies of violating Law No. 5/1999
on monopolies and unfair business practices.

These large companies must be punished in accordance with the
law, Alie said following a hearing with the Business Competition
Supervisory Commission (KPPU).

"Their complete domination of the industry has made small-
scale poultry breeders too dependent on them for supplies of day-
old-chicks (DOC), poultry feed and other things needed by the
breeders, including medicine and experts," Alie said.

This dependency makes the small-scale breeders vulnerable to
the unfair business practices of the major players in the market,
Alie added.

He said there were five large firms that controlled the
country's poultry industry from upstream to downstream, with
businesses ranging from poultry farming, feed production, poultry
shops and butcher shops.

He identified the five firms as PT Japfa Comfeed, PT Charoen
Pokphan Indonesia, PT Leong Hap, PT Wonokoyo Rojokoyo and PT
Sierad Produce.

Alie accused these firms of forcing small breeders, through
partnership contracts, to purchase all of their supplies from
them and sell their products to them.

The law on monopolies and unfair business practice was passed
two years ago. The 11-member KPPU was established to maintain a
fair playing field for all businesses and to prevent monopolies,
in accordance with the law.

After meeting with the PPUI, the commission held a hearing
with several large poultry companies to discuss PPUI's charges.

Charoen Pokphan spokesman Soeparman S. said during the hearing
the allegations made by PPUI were not supported by strong and
reliable data.

"Our selling price is always determined by production costs
and the purchasing power of the public. There is no ground to say
we set the price beforehand," Soeparman said in dismissing the
price-fixing charge.

As to the obligation of small-scale poultry breeders to
purchase their supplies and sell their products to the larger
firms, Soeparman said the scheme was meant to protect the
breeders from "uncertainties in market prices".

Charoen Pokphan produces about 240 million DOCs per year,
accounting for about 25 percent of the country's total production
of 960 million DOCs per year.

KPPU chairman Bambang P. Adiwiyoto said the commission was
still gathering information from all parties related to the case.

"Information is very crucial in allowing us to make a decision
that is fair to all parties," he said. (03)